In a blog post this week, Chainalysis argued that while disrupting terror financing is crucial, estimates of crypto flows to Hamas have become inflated beyond reality. The company warned against drawing flawed conclusions that could lead to misguided policies.
According to an article published last week by the Wall Street Journal, the Palestinian militant group Palestinian Islamic Jihad received around $93 million worth of cryptocurrency donations from August 2021 to June 2023. The report also stated that the group Hamas took in around $41 million in crypto over the same time period, with some of these funds allegedly going towards financing recent attacks. The Wall Street Journal cited data provided by blockchain analytics company Elliptic, which competes with Chainalysis in the crypto tracking space.
Critics noted the WSJ headline tied crypto directly to funding Israeli operations when it’s unclear if the flows actually reached militants. They also said crypto volumes pale in comparison to state funding of Hamas, especially from Iran.
Chainalysis argues that blockchains’ transparency makes crypto a poor solution for covert financing. Hamas itself halted crypto fundraising in April, citing risks to collaborators.
In their statement, Chainalysis argued that due to the transparent nature of blockchain transactions and the typically public campaigns for raising terrorism financing, cryptocurrency is not actually an effective way to fund terrorism on a large scale.
Chainalysis believes the inflated estimates being cited count all money sent to any service suspected of terror links, rather than just funds sent to wallets definitively controlled by Hamas.
The company said they have seen recent estimates related to attacks on Israel that seem to tally all money flows to certain services tied to any terrorism financing, rather than just flows explicitly and directly funding terrorism. In other words, Chainalysis claims the estimates include funds not directly connected to terror financing.
The degree of Hamas’ reliance on crypto is relevant for US policy debates on anti-money laundering rules for digital assets. Some lawmakers cited the disputed Hamas financing reports while advocating for stricter crypto oversight.
#Crypto News #Hamas #Chainalysis #Hamas crypto funding #Terror Funds
